- All-cash offer price represents premium of 62% over
unaffected trading price of the shares on September 16, 2016 (the date before which a
shareholder of Norsat publicly expressed an interest in acquiring
control of Norsat), and 66% over the 20-day volume weighted average
price ("VWAP") ending on September 16,
2016.
- Transaction has unanimous support of Norsat's Independent
Directors.
VANCOUVER, March 27, 2017 /PRNewswire/ - Norsat
International Inc. ("Norsat" or the "Company") (TSX: NII and NYSE
MKT: NSAT), a provider of unique and customized communication
solutions for remote and challenging applications, today announced
that it has entered into an arrangement agreement (the "Arrangement
Agreement") with Hytera Project Corp. ("Hytera") a subsidiary of
Hytera Communications Co., Ltd. pursuant to which Hytera will
acquire all the issued and outstanding shares of Norsat for
$10.25 in United States dollars ("USD") in cash per
share, pursuant to a court-approved plan of arrangement (the
"Arrangement"). All unexercised options and restricted share
units will also be acquired under the Arrangement. The proposed
transaction values Norsat at an equity value of approximately
$62 million USD.
As previously disclosed by Norsat on March 17, 2017, Privet Fund Management LLP
("Privet") submitted a non-binding letter of interest to acquire
the Company for cash consideration of $10.25 USD per
share subject to due diligence, financing, the completion of a
definitive agreement and other conditions. At that time, Norsat and
Hytera were in exclusivity with respect to a possible transaction.
Based on Hytera's offer of the same cash consideration as indicated
in Privet's non-binding letter of interest, with no further due
diligence, no financing conditions and the synergies between Norsat
and Hytera including but not limited to a greater global sales
presence, access to additional markets and research and development
collaboration, the Independent Directors of Norsat's Board of
Directors (the "Board") decided to proceed with the Arrangement
Agreement.
"After discussions with multiple parties and a comprehensive
review of several indications of interest with respect to a
strategic transaction, we are very pleased to have reached an
agreement with Hytera. We believe this all-cash transaction offers
Norsat shareholders immediate liquidity and certainty of value. We
thank our shareholders for their patience and support during the
strategic review, a process that has ultimately surfaced
significant value for all Norsat shareholders," said Fabio Doninelli, Director and Chairman of the
Board.
Cash Consideration and Attractive Premium – Under the
Arrangement, shareholders of Norsat will receive $10.25 USD per Norsat share in cash, offering
immediate liquidity and certainty of consideration. The cash
consideration per share represents a premium of 62% over the
unaffected trading price of the shares on the Toronto Stock
Exchange, on September 16, 2016, the
last trading day prior to the announcement on September 19, 2016 by Privet, a shareholder of
Norsat of its interest in acquiring Norsat. The Arrangement also
represents a premium of 66% over the 20-day VWAP on the
Toronto Stock Exchange ending on September
16, 2016.
Independent Directors Support and Approval – The
Independent Directors have unanimously determined that the
Arrangement is in the best interests of Norsat and its
shareholders. The Board has received opinions from its financial
advisor, Raymond James Ltd., and from KPMG LLP, an independent
advisor, that as of March 24, 2017
and subject to the assumptions, limitations and qualifications set
forth herein, the consideration to be received by shareholders of
Norsat pursuant to the Arrangement Agreement is fair, from a
financial point of view, to shareholders of Norsat (the "Fairness
Opinions").
Details of the Arrangement and Required Approvals – The
Arrangement will be subject to a number of customary conditions,
including the approval of Norsat shareholders and certain
regulatory approvals including under the Investment Canada Act.
The Arrangement will be considered by shareholders at an
upcoming special meeting and will require the approval of at least
66 2/3% of the votes cast by shareholders at the meeting. If
approved by shareholders, and subject to the receipt of all
required regulatory approvals, the transaction is expected to close
in the second quarter of 2017. Shareholders are encouraged to
review the detailed information to be contained in the management
information circular that is expected to be mailed to shareholders
in the coming weeks. The management information circular, a copy of
the arrangement agreement, the plan of arrangement, and related
documents will be filed with Canadian and United States securities regulators and will
be available on SEDAR at www.sedar.com and on EDGAR
at www.sec.gov.
The Arrangement Agreement provides for, among other things,
customary non-solicitation provisions, with "fiduciary out"
provisions that allow Norsat to terminate the Arrangement Agreement
to accept an unsolicited superior proposal in certain
circumstances, subject to payment of a termination fee of
$2.0 million USD and subject to the
right of Hytera to match the superior proposal in question.
The transaction is not subject to obtaining financing
commitments.
Advisors
Raymond James Ltd. is acting as financial
advisor to Norsat. Raymond James Ltd. and KPMG LLP, an
independent advisor, provided Fairness Opinions to the Board in
connection with the transaction. McMillan LLP is acting as Norsat's
legal advisor. Bayfield Strategy, Inc. has been retained as
Norsat's strategic communications advisor.
About Norsat International Inc.
Founded in 1977,
Norsat International Inc. is a provider of unique and customized
communication solutions for remote and challenging applications.
Norsat's products and services include leading-edge product design
and development, production, distribution and infield support and
service of fly-away satellite terminals, microwave components,
antennas, Radio Frequency (RF) conditioning products, maritime
based satellite terminals and remote network connectivity
solutions. More information is available at www.norsat.com, via
email at investor@norsat.com or by phone at 1-604-821-2800.
Forward Looking Statements
The discussion and analysis
of this news release contains forward-looking statements concerning
anticipated developments in Norsat's operations in future periods,
the adequacy of its financial resources and other events or
conditions that may occur in the future. Forward-looking statements
are frequently, but not always, identified by words such as
"expects," "anticipates," "believes," "intends," "estimates,",
"predicts," "potential," "targeted," "plans," "possible" and
similar expressions, or statements that events, conditions or
results "will," "may," "could" or "should" occur or be achieved.
These forward-looking statements include, without limitation,
statements about the proposed acquisition by Hytera, the potential
benefits that could arise due to the transaction, the expected
closing date of the transaction, Norsat's market opportunities,
strategies, competition, expected activities and expenditures as it
pursues its business plan, the adequacy of available cash resources
and other statements about future events or results.
Forward-looking statements are statements about the future and are
inherently uncertain, and actual achievements of the Company or
other future events or conditions may differ materially from those
reflected in the forward-looking statements due to a variety of
risks, uncertainties and other factors, such as business and
economic risks and uncertainties. The forward-looking statements
are based on the beliefs, expectations and opinions of management
on the date the statements are made. Consequently, all
forward-looking statements made in this news release are qualified
by this cautionary statement and there can be no assurance that
actual results or anticipated developments will be realized. For
the reasons set forth above, investors should not place undue
reliance on forward-looking statements. These forward-looking
statements are made as of the date of this news release and Norsat
assumes no obligation to update or revise them to reflect new
events or circumstances, other than as required by law.
SOURCE Norsat International Inc.